AT MAY 31, April and May

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1 June July August September October November December January February March April and may ISSN August 24, 2018 AT MAY 31, 2018 Note to the reader: Results for The first report of the fiscal year presents the financial transactions for the first two months of activity, i.e Subsequent reports will be produced on a monthly basis. Highlights for 2018 At May 31, 2018, the budgetary balance within the meaning of the Balanced Budget Act showed a deficit of $414 million. The balance takes into account the deposit of $524 million in the Generations Fund. Compared to last year: own-source revenue grew by $68 million, to $9.7 billion; federal transfers rose by $168 million, reaching $3.5 billion; program spending grew by $829 million, to $13.2 billion; the results of non-budget-funded bodies and special funds increased by $422 million Monthly budgetary balance (millions of dollars) The deficit for is higher than a year ago. For , the March 2018 Québec Economic Plan projects a balanced budget. SUMMARY OF CONSOLIDATED BUDGETARY TRANSACTIONS GENERAL FUND Revenue March 2018 Québec Economic Plan (1) Change (%) Change (%) Own-source revenue Federal transfers Total revenue Expenditure Program spending Debt service Total expenditure NET RESULTS OF CONSOLIDATED ENTITIES (2) Non-budget-funded bodies and special funds (3) Health and social services and education networks (4) 4 26 Generations Fund Total consolidated entities SURPLUS (DEFICIT) BALANCED BUDGET ACT Deposits of dedicated revenues in the Generations Fund Use of the stabilization reserve BUDGETARY BALANCE (5)

2 GENERAL FUND REVENUE At May 31, 2018, General Fund revenue reached $13.2 billion, an increase of $236 million compared to the same period last year. Own-source revenue reached $9.7 billion, an increase of $68 million compared to last year. This increase is due primarily to growth in revenue from corporate taxes ($149 million). Federal transfers amounted to $3.5 billion, up $168 million compared to May 31, This growth stems primarily from equalization and health transfers revenue, which increased by $108 million and $49 million respectively. GENERAL FUND REVENUE Revenue by source Change (%) Own-source revenue excluding revenue from government enterprises Income and property taxes Personal income tax Contributions for health services Corporate taxes Consumption taxes Other sources Total own-source revenue excluding revenue from government enterprises Revenue from government enterprises Total own-source revenue Federal transfers Equalization Health transfers Transfers for post-secondary education and other social programs Other programs Total federal transfers TOTAL

3 GENERAL FUND EXPENDITURE For the first two months of the fiscal year, General Fund expenditure totalled $14.3 billion, up $793 million, or 5.9 %, compared to the same period the previous fiscal year. Program spending rose by $829 million, or 6.7%, to $13.2 billion. The most significant changes were in the Health and Social Services mission ($332 million), the Economy and environment mission ($295 million) and the Education and Culture mission ($127 million). Debt service amounted to $1.1 billion, a decrease of $36 million compared to the same period last year. GENERAL FUND EXPENDITURE Expenditure by mission (6) Change (%) Program spending Health and Social Services Education and Culture Economy and Environment Support for Individuals and Families Administration and Justice Total program spending Debt service TOTAL

4 CONSOLIDATED ENTITIES At May 31, 2018, the results of consolidated entities showed a surplus of $1.2 billion. These results include: a surplus of $473 million for special funds; dedicated revenues of $524 million for the Generations Fund; a surplus of $243 million for non-budget-funded bodies; a deficit of $4 million for the health and social services and education networks. DETAILS OF THE TRANSACTIONS OF CONSOLIDATED ENTITIES 2018 Special funds Generations Fund Specified purpose accounts Transfers (expenditures) related to the tax system Non-budgetfunded bodies Health and education networks (4) Total Consolidation adjustments (7) Total Revenue Expenditure Expenditure Debt service Subtotal SURPLUS (DEFICIT)

5 NET FINANCIAL SURPLUS (REQUIREMENTS) Net financial surpluses (requirements) reflect the current budgetary balance, as well as the year-over-year change in receipts and disbursements in the course of the government s transactions. At May 31, 2018, the consolidated net financial requirements have stood at $790 million, a $523-million increase of requirements over last year. CONSOLIDATED BUDGETARY AND FINANCIAL TRANSACTIONS GENERAL FUND Revenue Change Own-source revenue Federal transfers Total revenue Expenditure Program spending Debt service Total expenditure NET RESULTS OF CONSOLIDATED ENTITIES (2) Non-budget-funded bodies and special funds (3) Health and social services and education networks (4) 4 4 Generations Fund Total consolidated entities SURPLUS (DEFICIT) Consolidated non-budgetary surplus (requirements) CONSOLIDATED NET FINANCIAL SURPLUS (REQUIREMENTS)

6 MARCH 2018 QUÉBEC ECONOMIC PLAN BUDGET FORECASTS FOR (millions of dollars) March 2018 Québec Economic Plan (1) Change (%) Own-source revenue excluding revenue from government enterprises Income and property taxes Personal income tax Contributions for health services Corporate taxes Consumption taxes Other sources Total own-source revenue excluding revenue from government enterprises Revenue from government enterprises Total own-source revenue Federal transfers TOTAL GENERAL FUND REVENUE Program spending Health and Social Services (8) Education and Culture (8) Economy and Environment Support for Individuals and Families (8) Administration and Justice Total program spending Debt service TOTAL GENERAL FUND EXPENDITURE Net results of consolidated entities Non-budget-funded bodies and special funds (3) 339 Health and social services and education networks (4) 26 Generations Fund TOTAL CONSOLIDATED ENTITIES Contingency reserve SURPLUS (DEFICIT) 904 BALANCED BUDGET ACT Deposits of dedicated revenues in the Generations Fund Use of the stabilization reserve BUDGETARY BALANCE (5) 6

7 Notes (1) The presentation of the budgetary information in this monthly report is consistent with that of the financial framework for the General Fund and consolidated entities as published on page A.25 of The Québec Economic Plan March (2) Details of transactions by type of entity are presented on page 4 of this report. (3) These results include consolidation adjustments. (4) The results of the networks are presented according to the modified equity method of accounting. (5) Budgetary balance within the meaning of the Balanced Budget Act, after use of the stabilization reserve. (6) Certain expenditures were reclassified between missions to take into account the transition to the budgetary structure. (7) Consolidation adjustments include the elimination of General Fund program spending. (8) To assess growth in based on comparable spending levels, the percentage changes for that year were calculated by excluding, from expenditures, transfers from the provision for francization attributed to the Health and Social Services mission ($12 million) and the Support for Individuals and Families mission ($75 million) and including them in the expenditures of the Education and Culture mission. The next monthly report, which will present the results at June 30, 2018, will be published on September 7, For more information, contact the Direction des communications of the Ministère des Finances at The report is also available on the Ministère des Finances website: 7